Shares of Latin American e-commerce giant MercadoLibre (NASDAQ:MELI) fell as much as 12.5% on Monday. Investors backed away from the stock as the novel coronavirus expanded its spread over South and Central America.
According to a Reuters report, the coronavirus claimed its first Latin American victim over the weekend after one patient died in Argentina. The number of reported infections in Costa Rica nearly doubled from five to nine, and the first cases of the COVID-19 respiratory illness were seen in Colombia, Paraguay, Peru, and Chile. MercadoLibre's investors are starting to worry about how the disease might affect consumers and small businesses in Latin America.
The disease took a while to find its way into Latin America, but the numbers are starting to rack up. Furthermore, Monday marked a historic drop in global oil prices, as a price war is brewing between Russia and Saudi Arabia. Some of MercadoLibre's largest markets -- such as Venezuela, Brazil, and Mexico -- are deeply invested in the oil trade and their economies will suffer if this price war drags on.
That being said, I'm not convinced that the coronavirus and oil conflict would be able to stop MercadoLibre's solid growth in its tracks, especially since the company is branching out into adjacent sectors like shipping and payment services these days. This is a high-quality company with a bright future, and ambitious investors may want to treat this price drop as a buying opportunity.